From the course: Entrepreneurship Foundations

Startup traction and scaling

From the course: Entrepreneurship Foundations

Startup traction and scaling

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- Woo hoo, things are rocking and rolling in your business, and it's time to crank it up a few notches. You're ready, you're rearing, and you have exactly no idea where to go. Don't worry, that's why we're here. When you begin to think about growing your business, the best place to start is to focus on very specific factors. For example, I know to grow a beautiful flower from a seed, I'll need three specific factors. Sunlight, water, and good soil. So what are the specific factors that will allow your business to grow and flourish? Let's walk through the most common factors that play a part in scaling a business. The one most people think of first is financial capital. To determine if this is something that you think you're going to need, you're going to have to use a little bit of imagination. Pretend someone put a million dollars into your company bank account tomorrow. From a business standpoint, how would this directly impact revenue growth? Would you be able to purchase more inventory to meet customer demand? Or perhaps would it allow you invest in equipment that allows you to produce things more efficiently? Remember to only think of what leads to revenue growth. Not nice to haves like higher salaries or perks for your employees. Speaking of employees, often times, human capital is needed to grow a business, and it's not necessarily an issue of money, but of people that can actually sit down and do the work. If human capital is needed to drive your business forward, remember to also think of what type of human capital. Does that person need to be based in your office or can they be remote or even a virtual employee? Do you need them year round or only during your busy seasons? Start to write down what types of people you would need and if you had them, what type of revenue growth would you see because of it? Intellectual capital can also be needed while scaling. Sometimes, you or the people around you that take your company from zero to a million dollars are not the people that you need to take it from a million to a billion dollars in revenue. There are many examples of this, but one of the most famous is Rob Kalin, who started Etsy. Rob replaced himself as CEO of his own company not once, but twice, yes. Once in 2008 and again in 2011. He realized that in order to keep growing the business, he might not be the best one for the job. Figure out if you have the intellectual capital within you and around you to grow the business. If not, start to look for individuals who have scaled businesses before that would be willing to join you. While every business has its own unique traits and ways of scaling, it also comes down to the right place at the right time with the right people. If you can get these key components in place, you're setting yourself up for lots of success.

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